PUNJAB NATIONAL BANK
BROAD SCOPE OF WORK FOR CONCURRENT AUDITOR
TREASURY OPERATIONS
Compliance with the guidelines dated June 20, 1992 issued by the RBI and all other circulars issued from time to time, along with the certificate to this effect every month.
Compliance with SEBI/ FEMA guidelines, along with the certificate to this effect every month.
Compliance with Investment policy and procedures approved by the bank, along with the certificate to this effect every month.
Compliance with all statutory provisions required to be adhered to by the bank, along with the certificate to this effect every month.
Certification that Investment Policy is framed in compliance with various circulars issued by RBI as applicable to the banks.
To ensure that accounting policy is in conformity with accounting Standards laid down by
ICAI, along with the certificate to this effect every month.
Verification of all deals, conducted in the Primary, Secondary and Forex market (except the Forex deals done through brokers and over telephone) in all type of existing instruments and new additions viz. Derivatives, Swaps, Futures, Options etc.
Verification of all money market transactions both domestic and forex.
Vouching, wherein it should be especially ensured that the vouchers have been correctly prepared and executed as per proper sanction within delegated authorities.
Verification of all registers / records / accounts for its accuracy / correctness and their maintenance so as to avoid unauthorized access to any person.
Verification of interest / dividend income.
Verification for correctness of all statutory and regulatory returns.
Control over bad deliveries, securities held by Custodian.
Verification if proper system is in place for collection of redemption/interest proceeds accrued/receivable.
Reconciliation of securities held whether in SGL, BR or Physical form, along with the certificate to this effect every month.
Brokerage paid is in line with the norms approved by the Bank.
Checking adequacy of Internal Control and Internal check system, along with the certificate to this effect every month.
Physical verification of securities, unused BRs, SGLs at Delhi Office, on monthly basis and for Mumbai office on quarterly basis.
Half-yearly review of portfolio and reporting to RBI.

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Confirmation that investment decisions/transactions have been carried out within delegated powers.
Confirmation that transactions are done at the rates beneficial to the Bank.
Certificate that Treasury Transactions conducted by Treasury Division have been done in accordance with RBI instructions issued from time to time.
Certificate that random checking of the voice recordings with the Deal slips at least once a week has been done to ensure that all deals (which are not online) are negotiated/struck only through telephones linked to the Treasury Voice Recorder and not through mobiles/other instruments.
Audit of Treasury operations through software implemented for front office and Back Office accounting i.e. Reuters (K+, K+TP) / other system.
OTHER AREAS
- Calculation / compilation and maintenance of data for total investment made in equity shares in a year (both in primary and secondary market), will be restricted to 5% of incremental deposits over the previous year (on Last Reporting Fortnight basis).
- Correctness and checking procedure for lodgement and repayment of Export
Refinances, LAF & Non-standard Repo / CBLO.
- Receipt of Interest on CRR, if applicable, Correctness of calculation and receipt and authentication of CRR Register.
- Monthly checking of proper dual custody/control for all security forms (SGL Form, BRs,
TPOs, Cash Orders, RBI Cheque Books etc. and their physical verification on quarterly basis.
- Periodic reports from custodian as per terms of agreement are being received on time.
- Follow up system of securities sent for transferring/splitting/conversion are being received back on time.
- Follow up system of LOAs not received – only allotment advice held.
- Timely conversion of LOAs into scrips and their follow up systems.
- Reconciliation of custodial charges, as per agreement, with transactions/holding
- Checking and ensuring on a weekly basis, reconciliation and review of Imprest account, on every Friday with BO: Bhikaji Cama Place, BO: Janpath and BO: PNB House,
Mumbai.
- Checking of the following with respect of securities: -
(a) Timely receipt of redemption proceeds and follow up system;
(b) Timely receipt of interest due and follow up systems;
(c) Correctness of interest accrued every month;
(d) Calculation of overdue interest for delayed payments and their follow up systems;
(e) Follow up/timely receipt of ITDCs;
(f) Checking of Suspense/Sundry entries and follow up system for adjustment of old entries;

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(g) Updation and balancing of Investment ledgers (For Face Value, Book value, Interest
Accrued) for central loans, state loans and all India Bodies is done every month and for other securities every quarter. All changes in balance of different securities during the month are accounted for;
(h) Balancing of books and their checking with the weekly statement of affairs generated from the computer system, on monthly basis;
(i) Reconciliation of Audited location certificates from the designated branches on quarterly basis with the records;
- NPAs – monitoring and follow up.
- Inspection irregularities follow up and Review.
- Rotation of duties of members of staff as per bank’s guidelines be ensured.
- Ensure that Dealers have availed leave as per RBI guidelines. .
- Proper maintenance/checking of leave records.
- Booking of expenses within delegated powers and with proper sanction.
- Inventory Management.
- Dak Receipt/disposal – Proper systems and procedures.
- Verification of correctness of TDS (deducted at source) and issue of Income Tax
Deduction Certificates and its timely deposit.
- Scope of work can be enlarged/amended at Bank’s sole discretion.
- Adherence to RBI guidelines relating to derivatives & hedge effectiveness .
PERIODICITY FOR SUBMISSION OF REPORTS
The monthly draft report on Treasury Transactions, as per RBI requirement should be submitted to the Bank, latest by the 10 th of following month, so that the Management comments can be submitted to the Audit firm, for incorporating in the final monthly report and submitted to RBI within reasonable time.
The half yearly review report, along with separate Executive summary should be received by the end of April and October, so that these reports can be placed before the Bank’s Board and sent to
RBI within 45 days of closure of the Half-year concerned.
Concurrent Auditor will also submit a quarterly report to Treasury Division, HO in respect of adherence to guidelines to 'Operational Risk'. A copy of the report will be submitted to RMD, HO also, for information.
Concurrent Auditor at quarterly interval will verify the books of accounts and /or certificate of holding of securities held by custodian on behalf of the bank to ensure its correctness and issue a certificate to Treasury Division, HO.

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FEO OPERATIONS
Activities to be performed in respect of Concurrent Audit of FEO New Delhi viz. Merchant dealing cover operations, Settlement of Interbank deals and related MIS, Lodgement & realization of export bills FOBP/FOBC etc., Reimbursement of branch claims on account of IMT (Inward remittance),
Book delivery & cancellation of merchant Forward contracts, Collection & realization o Clean cheques TCs, FCNR (Opening, renewal, closure) & their reconciliation with branches, Foreign
Currency Loan/FCTL/PCFC disbursements/ adjustments, Gold & Gold Coins backup, Nostro accounts reconciliation, Establishment (Staff related matters), Application of exchange rates on various transactions, Software related issues of EBT Saksoft & RETAD applications, besides All existing activities in the ambit of internal Concurrent Audit.
OTHER TERMS AND CONDITIONS a. Certification on prescribed periodicity to regulatory authorities i.e. Stock Exchanges (NSE /
BSE) relating to the operation of the bank in the currency future segment & MCX or any other exchange / Authorities or any other segment like options etc. introduced in future. b. The job of Concurrent Audit is to be performed by a team headed by one Senior Chartered
Accountant who will visit our Office daily. c. An undertaking to keep secrecy of all transactions / information has to be furnished. d. The audit shall be undertaken as per broad scope of audit, which may be amended from time to time.